The 80/20 rule, also known as the Pareto Principle, states that 80% of outputs or results come from 20% of causes or efforts. The rule was named after Vilfredo Pareto, an Italian economist who observed that 80% of Italy’s land was owned by 20% of the population.
Today, the 80/20 rule can be applied to various industries and areas of life. For example, the 80/20 rule in time management states that 20% of your daily tasks may generate 80% of your productivity. It can also be applied to weight management: eating healthy foods 80% of the time and allowing occasional treats or snacks for the remaining 20%.
This article answers the question, “What is the 80/20 rule in marketing?” and discusses the various ways it can help your business.
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What Is the 80/20 Rule in Marketing?
The 80/20 rule in marketing states that 80% of results are a product of 20% of actions. Examples of the 80/20 rule in marketing include:
- 80% of results are a product of 20% of the time invested
- 80% of complaints come from 20% of customers
- 80% of website traffic comes from 20% of keywords used
- 80% of online product sales come from 20% of products
- 80% of sales come from 20% of customers
- 80% of leads or conversions come from 20% of marketing campaigns
- 80% of posts should provide value (education, entertainment, or information), while 20% should be purely promotional
- 80% of results are driven by 20% of top performers
Understanding how the 80/20 principle applies to your business helps you to focus your resources on high-performing customers, platforms, or content, and adjust strategies that don’t work as well.
Look at your marketing efforts and identify the content or products that drive most of your sales leads or engagement.
What does that content or product have that makes it perform so well? And what changes can increase these outcomes even more?
Perhaps you can add visuals or calls-to-action, or repurpose that content into different formats like videos, infographics, or webinars to reach a wider audience.
Note that while it’s called the 80/20 rule, the exact ratio varies on a case-by-case basis. In practice, the split might be 70/30, 90/10, or something in between.
The 80/20 rule is more of a guideline to help identify where to focus your time, energy, or resources for maximum impact. The key takeaway here is that a relatively small portion of inputs often accounts for a disproportionately large share of results.
How To Use the 80/20 Rule in Marketing?
Here’s how to streamline the 80/20 rule in your business strategy:
Find Your Best Customers
Identify the 20% of customers who generate the most revenue.
Check your sales data and identify the sources that brought these customers to you. Was it through Instagram, Facebook, or a different channel?
Then, find out where they’re located. If most of your high-value customers come from a specific location, consider increasing ad spend in that region, creating location-specific content, or running promotions for your target audience.
Other customer-related information to consider includes:
- Age, gender, and income level
- Average transaction size of each customer
- Purchase channels (online or in-store)
- Interaction with emails, social media marketing, and website visits
Identify Your Most Profitable Products or Services
The 80/20 rule states that 80% of your profit comes from 20% of your products or services. Determine which of these offerings contributes most to your revenue and focus on improving, promoting, and expanding them.
This isn’t to say that you should abandon the other 80% of your products/services. Customers love variety, and there may come a time when some might consider testing those products.
However, you should put more of your time, effort, and resources into the offerings that actually perform well rather than spreading your resources thin over the less popular ones.
Optimize Website Traffic and Content
Analyze which of your keywords, blog posts, or content brings the majority of your traffic or engagement. Use them as a guide and focus your SEO, automation, content creation, and social media posting efforts on similar high-performing topics, formats, or styles.
For example, if most of your traffic comes from an article about healthy meal planning, create more content on related topics like easy recipes, nutrition tips, or grocery shopping guides.
That way, users who read your content are more likely to explore related articles rather than clicking off your site after they’ve finished reading.
Adjust Your Marketing Strategy
Prioritize your time and budget the effective marketing strategies that deliver the highest return. Which campaign or channels bring in the most leads or sales? Which content marketing strategies can you reduce or eliminate?
Use analytics tools, KPIs, and metrics to identify which channels generate the most traffic, leads, and conversions. Allocate more resources to the high-performing ones, and reduce spending on those that consistently underdeliver. Redirect that budget toward strategies that show proven results to maximize your return on investment (ROI).
Also, consider tweaking your ad to improve its effectiveness. Test new headlines, calls to action, or audience targeting. The 20% that drives your sales today might not do the same 6 months from now.
Take Note of Your 20% Employees or Salespeople
If you run a business with multiple employees, you likely have several noteworthy individuals who consistently perform the best. These employees are those who drive up your sales and become customers’ favorites.
Take note of their approaches, behaviors, attitudes, and the way they treat customers. Apply their techniques to a training manual and ask the rest of your sales team to follow these guidelines.
If possible, ask the top-performing employees to train fellow employees. Don’t let them do it for free. You don’t want them to feel as though you’re taking advantage of them.
Additionally, make sure you regularly reward them for their efforts. Bonuses, gift vouchers, salary increases, and other perks motivate them to continue performing exceptionally.
Don’t Forget About the Other 80%
Don’t overfocus on your top-performing customers, digital marketing strategies, or products. Just because they perform well doesn’t mean that you should abandon the other 80%.
You’d be surprised by all the hidden opportunities you can find in underperforming content or customers. You just have to find out how to optimize, reposition, or repurpose them to add more value.
Prioritize that work best, but stay open to untapped potential elsewhere. Trends change all the time. You don’t want to be left behind because you’ve put all your eggs in one basket.
What To Do With the 20% “Problem” Customers
According to the 80/20 rule, 80% of complaints come from 20% of customers. And sometimes, that 20% is the loudest. They’re often hard-to-please or overly demanding, and mess up your productivity through impossible-to-meet requests, recurring questions, or loud complaints on social media that can damage your reputation.
Instead of ignoring or stressing about them, take the following approach:
Identify Patterns
Look for common traits or behaviors among these customers. What are the most common complaints, and how can you address them effectively? Are your terms unclear? Do they expect more than you offer? Is there a specific feature or service that causes them trouble?
List those patterns and look into adjusting your policies, improving customer experience, or simplifying the product or service.
Improve Communication
Sometimes, problem behavior stems from miscommunication or misaligned expectations.
Make sure your product descriptions and policies are clear and transparent.
If a certain policy is hidden in a lengthy 100-page terms and conditions, customers are likely to miss it. Highlight important policies in visible areas like the front page, FAQs, checkout pages, or confirmation emails.
Set Boundaries
You can’t please everyone. There’s always bound to be a certain percentage of people who dislike or criticize your products. As long as that percentage doesn’t exceed 20% and the majority of your customers are happy and content, you’re doing something right.
If certain customers are repeatedly abusive, unprofitable (i.e., constantly demand freebies, refunds, or compensation for the smallest inconvenience), or unreasonably demanding, it’s okay to let them go.
Protecting your team and brand reputation is just as important as acquiring new business.
Use Feedback Constructively
Problem customers can pinpoint issues in your products, services, or website/social media content. Use their feedback to improve your customer experience and the services you’re providing.
Is the 80/20 Rule a Proven Marketing Strategy?
There is little scientific research that proves or disproves the effectiveness of the 80/20 rule. However, there is plenty of anecdotal evidence from businesses, marketers, and entrepreneurs that supports its validity.
The 80/20 rule isn’t a mathematical law, and isn’t limited to the 80-20 percentage. In fact, the numbers don’t even need to add up to 100% for the strategy to apply. If you notice that 70% of your online traffic comes from 15% of your products, it still represents the Pareto principle.
The rule exists to let us know that a small portion of our efforts often yields the most results.
